Technology and human behaviors have transformed dramatically in the past few decades, but organizations have not kept up. The pace of disruption has become overwhelming and unpredictable.
Businesses everywhere are failing, stagnating, or struggling to stay ahead of the curve. Consumers have the ability to tank a brand overnight with a single tweet. Entire supply chain can be disrupted by events halfway around the world. Competitors can appear on the scene, seemingly overnight. A traditional, decades-old business model can be turned on its head by a single idea.
The root of these many challenges lies in a massive shift in our operating environment. Due to dramatically increased speed and a radical rise in interdependencies, the sheer complexity of our world has ensured that almost every kind of organization, from business to government to non-profit, will find it harder to operate at the pace necessary to win in the information age.
Our internal systems and processes have simply not kept up with the changing external environment— organizations are trying to tackle 21st century challenges with last century’s solutions.
The 20th century approach to management—maximizing efficiency, squeezing out every drop of productivity, and slashing costs—is no longer sufficient. Carefully laid strategic plans are ruined by unforeseen variables, and organizations with rigid structures are too inflexible to adapt. In today’s fast-paced world, efficiency is still necessary, but it no longer guarantees success. Organizations that adhere to the tried-and-true tactics that made them successful decades prior will only continue to be frustrated with the outcomes.
Furthermore, this tension between the new, changed environment and the old way of doing business has real world effects. The mismatch between operating environment and internal models impedes organizational performance, creating issues in areas as diverse as strategy implementation, decision-making, operations, leadership, and talent management. Struggling in any one of these areas impacts the bottom-line of any company.
Complexity will only continue to increase, and organizations must fundamentally transform the way they operate to keep up. In order to tackle these challenges, efficiency-based operating systems need to give way to a networked, flexible, and resilient team of teams that can adapt to an ever-changing problem set. Without decisive action and built-in enterprise agility, businesses risk becoming paralyzed by indecision, disrupted by change, and ultimately overtaken by new, nimbler competitors.
The path forward is clear: adapt or get left behind.